You be the Judge: Read the Fine Print

If you have insurance, but haven't read the policy, this may interest you.

Many businesses have purchased insurance protection on Comprehensive General Liability policies (CGL).

A condominium association recently recovered a judgment against several contractors whose work in the construction of condominiums was defective.

The contractors had CGL insurance, but the insurance companies claimed that defective workmanship was not covered by the policies.

The trial judge agreed with the insurance carriers. The CGL policies provided for coverage under certain circumstances. Defective workmanship--where the damages claimed are the cost of correcting the work itself--did not meet the CGL policy definitions for "property damage" or an "occurrence".

The association appealed.

YOU BE THE JUDGE: Don't insurance policies issued to contractors provide coverage for defective workmanship?

The Appellate Division of the Superior Court agreed with the trial judge.

Generally speaking, CGL policies provide coverage for the risk of injury to people and damage to property caused by faulty workmanship; but no coverage for the cost of correcting the faulty work. For the most part, the decision followed the policy interpretation announced by the New Jersey Supreme Court in 1979.

Of course businesses and homeowners should require contractors to give a certificate of insurance naming them as additional insureds before starting work. But remember--these certificates do have limitations.

The decision points out that a courtroom can bring justice and may be the only way to protect your rights. Our Firm knows courtrooms; we have harnessed the power of the law in courtrooms to bring justice for our clients for decades in Lodi, Wyckoff, Mahwah, Maywood, Midland Park and throughout Bergen County, in Little Falls, Ringwood, Passaic, Little Falls and elsewhere in Passaic County, in Livingston, West Caldwell, Roseland, Maplewood, Montclair and throughout Essex County, in Whippany, Montville, Jefferson, Madison and Long Valley and Mendham in Morris County, in Murray Hill, Kenilworth, Mountainside and Cranford in Union County, in Long Branch, Marlboro and Manasquan in Monmouth County, in Metuchen and Middlesex in Middlesex County, in Kearny, Bayonne, Union City and North Bergen in Hudson County, in Hightstown, Hamilton Township, Frenchtown and Princeton in Mercer County and throughout the State of New Jersey, as well as New York City. Please contact us to discuss how we can help you in a new lawsuit or provide a "second opinion" about your pending lawsuit. There is no obligation for the initial consultation.